Energy Journal: Saudi Moves Roil Oil Market

By Ben Winkley

Saudi Arabia cut its oil production by close to 5% in December in response to lower demand, chiefly from Asian customers, The Wall Street Journal’s Summer Said reports. The move pushed up key crude contracts to 16-week highs.

The Kingdom’s deepest production cut in almost three years comes amid expectations for lower demand for OPEC crude this year. Platts lays out the challenges that lie ahead for OPEC and argues that Saudi Arabia still has a role as the swing producer in the market.

There is broad consensus that the oil market looks oversupplied this year, albeit with imports to China—the driver for most of the demand growth for the past few years—growing slightly in 2011 and likely to do so again in 2013, according to The WSJ’s Wayne Ma.

There is plenty of Nat Gas available. Little drilling for gas only wells occurred in 2012 and production continued to rise. Field sources report that we/are flaring off as much nat gas in ND where it is a useless by product as we are producing in the rest of the country.

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